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Informist, Tuesday, Aug. 25, 2026

MUMBAI – Global gold miners’ margins for the second quarter of 2026 could come under pressure as gold prices retreated from January record highs while mining costs are expected to rise, the World Gold Council said. The margin outlook weakened for Apr-Jun as the average gold price fell 7.2% from the trailing quarter, while gold producers' all-in sustaining costs are expected to rise further as the war in West Asia and associated supply chain disruptions persisted.

Since much of the escalation in West Asia occurred towards the end of the March quarter, the full impact of fuel, freight, and consumable costs is expected to become more apparent from Apr-Jun. South Africa-based major gold mining firm, Gold Fields Ltd., recorded a 40% rise in freight and consumables costs since the start of the war in West Asia, the council said.

Gold mining is expected to remain costly as the closure of the Strait of Hormuz and damage to resources and energy infrastructure in the region have disrupted global supply chains, contributing to higher fuel, freight, shipping, and consumables costs continuing to feed through to producers, the council said. Meanwhile, royalties have become an increasingly significant component of miners' costs, accounting for 12% of all-in sustaining costs in Jan-Mar, double their share five years earlier.

The global average production costs for gold miners rose 16% on year and 5% sequentially to $1,785 an ounce in the first quarter of 2026, marking the 28th consecutive annual increase, WGC said in a report. Gold prices, however, rose much faster, with the average price increasing 70% a year ago and 17% sequentially in Jan-Mar. This pushed miners’ average margins to a record $3,076 an ounce, up 134% from a year earlier. Spot gold prices reached unprecedented new highs, hitting $5,595 per ounce in January, while recording by far the highest quarterly average nominal price on record.  End

US$1 = INR 95.41

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Reported by Somen Bose

Edited by Deepshikha Bhardwaj

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